The Provident Fund of the State of Geneva (CPEG), for example, was very little affected by the fall in its investments in Credit Suisse. “The corrective amounts to 6 million francs. Out of a total fortune of more than 20 billion, this represents an impact of -0.03% for CPEG”, explains its director Christophe Decor in 7:30 p.m.
The CPEG is no exception: the twenty funds contacted by the RTS report insignificant losses. The value adjustments announced this year by Swiss pension funds are minimal.
A vertiginous fall in the stock market
But the picture is different from a historical point of view: it’s been fifteen years since the funds lost money because of Credit Suisse. In 2007, the action of the bank was worth 96 francs against 83 cents today, a heritage divided by 115 for investors. The Ethos Foundation, which represents 240 pension funds, estimates the loss to be in the billions.
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“At the end of 2007, Credit Suisse accounted for 6% of the Swiss stock market index. Today, it is 0.2%. If we reduce this to pension fund investments, we are talking about 4 billion losses”, analyzes Vincent Kaufmann, director of the Ethos Foundation.
Mopped up losses
However, the funds’ investments have diversified. Certain investments, in real estate in particular, have very largely compensated for the fall of Credit Suisse.
The Freiburg State Staff Provident Fund has suffered around 40 million losses since 2007, indicates its director Gilles André. “But at the level of a fund like ours, which made during the same period about 2 billion gains on investments, it is relatively anecdotal,” he tempers.
Satisfactory coverage rate
Despite repeated economic and stock market crises, the situation of pension funds is improving. Gilles André mentions an upward trend in the coverage rate of his fund, which represents the relationship between its capital and its benefits to its policyholders. That is to say a key indicator of its financial health.
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“We have been able to create, between 2014 and today, a capital increase of 5 billion,” says Christophe Decor, which also means an increase in the coverage rate.
For pensions, the finding is therefore pleasing: the billions lost after the fall of a giant have only a very limited impact.
nre/ami